Welcome to Extreme Investor Network, where we provide unique and valuable insights into the stock market, trading, and everything related to Wall Street. Today, we are going to dig into the relationship between natural gas prices and the 20-Day Moving Average (MA), and how it can tell a story about market trends.
The 20-Day line is a key indicator that traders use to gauge the strength of a trend. In recent days, we have seen natural gas prices fluctuate around this line, with Monday ending above it but Tuesday closing below. As of now, natural gas is showing weakness, trading in the lower third of the day’s range and below the 20-Day line. This could indicate a potential deeper retracement if the line continues to act as resistance.
A break below the recent low of 2.635 would signal further weakness in natural gas prices, potentially leading to a deeper retracement. However, a dip below Tuesday’s low of 2.70 would provide an earlier warning sign of pending weakness. The next support levels to watch for are the 200-Day MA at 2.47 and the 50-Day MA at 2.43.
Despite these potential bearish signals, there is a bullish case to be made for natural gas prices. Monday’s low found support near the 78.6% Fibonacci retracement level, indicating strength in the market. If the price can hold above the 38.2% Fibonacci level at 2.55 and close above 2.95, it could signal a positive trend reversal.
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